1

Fourth Quarter Earnings ReleaseJanuary 21, 2010

Jim Young, Chairman & CEO

2

Fourth Quarter Results

2008

$1.08

Diluted Earnings per ShareRevenue Carloads(Year-Over-Year % Change)

2009

$1.31

4%-18%

-3%

-13%

October November December

3

Delivering Strong Results in a Recession2009 Year-End Review

• Safety Records

• Excellent Operations

– Best ever service metrics

– Customer service “bests”

• Record Operating Ratio

• Strong Balance Sheet

• Positioned for the Future

4

Fourth Quarter Marketing & Sales ReviewJanuary 21, 2010

Jack Koraleski, Executive VP – Marketing & Sales

5

Fourth Quarter Recap

Intermodal

Agricultural

Chemicals

Automotive

Industrial

Energy

TOTAL -5%

-2%

-15%

1%

3%

5%

Volume Revenue

-13%

-7%

-22%

-1%

-7%

-3%

-21% -28%

6

Agricultural ProductsFourth Quarter - $738 Million

Quarterly Drivers

• Strong Export Demand for Soybeans and Meal

• Growth in Ethanol & DDGS

• Record Unit Train MovesGrain

Products 40%

Whole Grains

39%

Food/ Refrigerated

21%

Revenue Mix

Volume ARC Revenue

(%)

-7-10

3

7

Quarterly Drivers

• Increased Production

• Parts Growth

AutomotiveFourth Quarter - $302 Million

Auto Parts 21%

Finished Vehicles

79%

Revenue Mix

Volume RevenueARC

(%)

1

-2

-1

8

Quarterly Drivers

• Weak Soda Ash and Petroleum Markets

• Late Harvest Impacts Fertilizer

• Export Plastics Growth

ChemicalsFourth Quarter - $539 Million

Revenue Mix

Plastics 20%

IndustrialChemicals

26%Soda Ash

17%

Petroleum & Other

23%

Fertilizer 14%

Volume RevenueARC

(%)

-2

-5

-7

9

Quarterly Drivers

• Tough Year-Over-Year Comparison

• High Coal Stockpiles

• 1/1/09 Southern Powder River Basin Contract Losses

• Colorado/Utah Production Issues

EnergyFourth Quarter - $765 Million

Colorado/Utah 20% Southern

Powder River Basin 72%

Other 8%

Revenue Mix

Volume RevenueARC

(%)

-15-8

-22

10

Industrial ProductsFourth Quarter - $513 Million

Quarterly Drivers

• Major Segments Reflect Economic Weakness

• Waste Shipments Grow

Paper 16%

Lumber 16%

Metals 23%

Construction Products

14% Consumer/ Waste/

Machinery 10%Minerals/

Consumer21%

Revenue Mix

Volume RevenueARC

(%)

-21

-9

-28

11

IntermodalFourth Quarter - $684 Million

Quarterly Drivers

• International Weakness vs. Domestic Strength

• New Hub BusinessInternational 49%

Domestic 51%

Revenue Mix

Volume RevenueARC

(%)

5

-8

-3

12

Customer Satisfaction Index

2007 2008 2009

7983

Full Year

88

13

18+% To Re-Price (As of 1/1/2009)

Legacy OpportunityTotal Percent of Revenue

2013+

2010

20112012

4%

2%

7%

1%

Re-Priced

since 2004

4%

Re-Priced

since 2004

<1%

3%

6%

2%

7%

2009

2010

2011

2012

2013+

14% To Re-Price (As of 1/21/2010)

Remaining Legacy

Energy 67% Intermodal 29% All Other 4%

2%

14

2010 Outlook

• Consumer Spending/ Economic Recovery

• Volume Growth Opportunities in All Groups

• Pricing Gains

• Strong Value Proposition

15

Fourth Quarter Operations ReviewJanuary 21, 2010

Dennis Duffy, Vice Chairman – Operations

16

2009 Safety Performance

Employee(Personal Injury Incidents Per

200,000 Man-Hours)

Customer(Incidents Per Million Train Miles)

2009*200820072006

2009*200820072006

2009*200820072006

-24% -26%

-26%

Public(Crossing Accidents Per

Million Train Miles)

*Best ever safety performance

17

2009 Service Metrics Full Year

AAR Velocity(MPH)

10.5

Freight Car Utilization(Cycle Days)

27.3

2006 2009*

21.4 8.6

Good

2006 2009*2007 2008 2007 2008

2007 20082006

27.2

2009*

24.8

2007 2008

AAR Terminal Dwell(Hours)

Good

Service Delivery Index**

69

2006 2009*

92Good

**Includes early deliveries

Good

*Best ever service metrics performance

18

Performance Sustainability

Volume

Variability

Service

ExcellenceUpside

Leverage

• Train Capacity and

Locomotive

Practices

• Surge Capabilities

• Process Discipline

• Capital Investments

and Total Cost of

Ownership

• Infrastructure

Condition

Service Performance & Volume

100

125

150

175

200

225

60

70

80

90

1007-Day Carloads

SDI**

2006 2007 2008 2009

**Includes early deliveries

• 4,200 TE&Y

• 1,600 Locomotives

• 44,000 Freight Cars

Furloughs/Stored*:

GTMs

Train Starts

*As of 1/16/2010

Full Year 2009 Variability

-17%

-20%

19

2009 Capital Achievements

Kansas City St. Louis

North Platte

Los Angeles Ft.

Worth

San Antonio

El Paso

Houston

Portland

Oakland

Chicago

Salt Lake City

Denver

Joliet

2009 Capacity & Commercial Projects

New Orleans

“Red X”

$2.5 Billion Investment(In Millions)

Engineering Replacement

$1,675

Locomotives& Equipment

$375

Capacity/ Commercial

Facilities $375

Technology

& Other $100

Replacement

Slow Orders Down 30% Boone High Bridge Donner Pass

Growth and Productivity

20

2010 Operating Initiatives

• Drive Toward “Best in

Class” Safety

• Service Excellence

• Strong Infrastructure

• Fewer Assets, More

Carloadings

• Resilient, Agile and

Volume Variable

21

Fourth Quarter Financial ReviewJanuary 21, 2010

Rob Knight, CFO

22

$ 3,754

2,752

1,002

23

(153)

(321)

$ 551

507.8

$ 1.08

$ 4,286

3,145

1,141

25

(127)

(378)

$ 661

506.5

$ 1.31

Fourth Quarter Earnings SummaryIn Millions (except EPS)

Operating Revenue

Operating Expense

Operating Income

Other Income

Interest Expense

Income Taxes

Net Income

Weighted Average Diluted Shares

Diluted EPS

2009 2008 %

(12)

(12)

(12)

(8)

20

(15)

(17)

-

(18)

23

Diluted Earnings Per Share Comparison*Fourth Quarter

2009 Earnings Offsets

• Casualty Costs +$0.04

• One-Time Pacer Payment -$0.04

Business Summary

• Price and Productivity

Offset Volume Decline

and InflationReported

2008Fuel

Surcharge

Lag Impact

2008

Excluding

Fuel

Surcharge

Lag Impact

Reported

2009

$1.31

$0.22

$1.09 $1.08

*See Union Pacific Web site under Investor Relations for a reconciliation to GAAP.

24

Continued Core Pricing Gains

Reported Core Price (Including RCAF Fuel Impact)Price Excluding RCAF Fuel Impact

Quarterly(2009)

Q1 Q2 Q3 Q4

Full Year

6%

5%5%

6%

6%

3.5%4%

5%

2006 2007 2008 2009

7%

4.5%

6%6%6.5%

5.5%

5%

5.5%

25

Compensation & BenefitsFourth Quarter – In Millions

$1,101

2008 2009

$1,018

-8%

• 10% Workforce Reduction

• Improved Labor Efficiency

– Volume variability

– Less overtime

26

Fuel ExpenseFourth Quarter – In Millions

• Reduced Fuel Prices Saved

$102 Million

• -10% GTMs Saved $73 Million

• Impact of Fuel Conservation

Programs and Technology

Investments

$2.46

2008 2009

$2.05

289256

Average Fuel Price(Per Gallon Consumed)

2008 2009

Fuel Consumption (Million Gallons)

27

Purchased Services & MaterialsFourth Quarter – In Millions

• Decreased Contract

Services Expense

– Less crew transportation

and lodging

– Lower facility costs

• Less Locomotive and

Freight Car Material

$458

2008 2009

$421

-8%

28

DepreciationFourth Quarter – In Millions

• Ongoing Capital Investments

• Restructured Locomotive Leases

$353

2008 2009

$377+7%

29

Equipment and Other RentsFourth Quarter – In Millions

• Restructured Locomotive Leases

• Lower Volume & Increased Productivity

– Less leased equipment

– Reduced short-term car rents

$320

2008 2009

$266

-17%

30

OtherFourth Quarter – In Millions

• $30 Million Pacer Payment

• Reduced Casualty Expense

• Lower Bad Debt Expense

• Increased Equity Income

• Other Miscellaneous Expense Reductions

$181

2008 2009

$129

-29%

31

Flexible, Efficient Cost Structure

Carloads

*The calculation normalizes for the change in diesel fuel prices. (See Union Pacific website under Investor Relations for a reconciliation to GAAP.)

Key Drivers9,261

2009 2008

7,786

• Xxx

• Xxx

• xxx

• Project Operating Ratio

• Increased Operating Effectiveness

• Total Cost of Ownership Focus

• Reduced Administrative Burden

-16%

Operating Expenses(In Millions)

13,895

2009 2008

12,099

-13%

Fuel Price

Adjusted*

10,751 Reported

32

Operating Ratio(%)

2006 2007 2008 2009

79.6 79.4

73.4 73.3*

2006 2007 2008 2009

81.5

79.3

77.376.0*

Fourth Quarter Full Year

*Best ever quarterly and full year Operating Ratio

33

Full Year Income StatementIn Millions (Except EPS)

Operating Revenues $ 14,143 $ 17,970

Operating Expenses 10,751 13,895

Operating Income 3,392 4,075

Other Income 195 92

Interest Expense (600) (511)

Income Before Income Taxes 2,987 3,656

Income Tax Expense (1,089) (1,318)

Net Income 1,898 2,338

Diluted EPS $3.75 $4.54

2009 2008 %

(21)

(23)

(17)

F

17

(18)

(17)

(19)

(17)

34

Strong Financial PositionIn Millions

*See Union Pacific Web site under Investor Relations for a reconciliation to GAAP.

Adjusted Debt to Capital

Free Cash Flow*

2009200820092008

$825

$515

Total Debt*(Adjusted)

$13,934 $14,376

47.4%45.9%

Generating

Solid Cash

Balance Sheet

Improvement

35

Capital UpdateFull Year – In Billions

20092008

$3.1

$2.5 $2.5

2010E

• $200 Million for Positive Train Control

• No Locomotive Purchases

• $150 Million Joliet Intermodal Terminal Completion

Total Capital Spending*

*Includes Cash Capital, Leases and Other Non-Cash Capital

$2.3

Base

Capital

PTC

36

2010 Drivers

• Volume Growth

– 2009 comparison

– Economy dependent

• “Real” Pricing Gains

• Diesel Fuel Prices

– Current spot price at $2.15+/gallon

– First half 2009 fuel surcharge lag

• Labor Cost Pressures

– Agreement health and welfare

• Drive Stronger Shareholder Returns

37

Fourth Quarter Earnings ReleaseJanuary 21, 2010

Jim Young, Chairman & CEO

38

A View to 2010

• Slow Economic Environment

• Attract New Business with Excellent Service

• High Customer Expectations

• Regulatory Activity

• Remain Focused on Margin Improvement

– Cost efficiency

– Pricing gains

39

Cautionary Information

This press release and related materials contain statements about the Corporation’s future that are not statements of historical fact, including specifically the Corporation’s outlook regarding economic conditions, future productivity, future safety and operating performance, the success and outcome of network management initiatives and strategic investments, competitiveness and quality of service, and its ability to generate financial returns and significant margin leverage and take advantage of new business opportunities. These statements are, or will be, forward-looking statements as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements also generally include, without limitation, information or statements regarding: projections, predictions, expectations, estimates or forecasts as to the Corporation’s and its subsidiaries’ business, financial, and operational results, and future economic performance; and management’s beliefs, expectations, goals, and objectives and other similar expressions concerning matters that are not historical facts.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times that, or by which, such performance or results will be achieved. Forward-looking information, including expectations regarding operational and financial improvements and the Corporation’s future performance or results are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statement. Important factors, including risk factors, could affect the Corporation’s and its subsidiaries’ future results and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements. Information regarding risk factors and other cautionary information are available in the Corporation’s Annual Report on Form 10-K for 2008, which was filed with the SEC on February 6, 2009. The Corporation updates information regarding risk factors if circumstances require such updates in its periodic reports on Form 10-Q and its subsequent Annual Reports on Form 10-K (or such other reports that may be filed with the SEC).

Forward-looking statements speak only as of, and are based only upon information available on, the date the statements were made. The Corporation assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. If the Corporation does update one or more forward-looking statements, no inference should be drawn that the Corporation will make additional updates with respect thereto or with respect to other forward-looking statements. References to our Web site are provided for convenience and, therefore, information on or available through the Web site is not, and should not be deemed to be, incorporated by reference herein.

40

Fourth Quarter Earnings ReleaseJanuary 21, 2010

Question & Answer Session